The 2018 Giving USA report, released in June and reflecting the calendar year 2017 plus a partial view of 2018 trends, was the sector’s first quantitative read on the impact of the Tax Cuts and Jobs Act on charitable giving. Total giving for 2017 had been at a record $410 billion in nominal terms, partly inflated by accelerated December gifts as donors locked in deductions before the new rules took effect. The 2018 figure, when published the following year, would tell a clearer story.
The shape of the decline
Individual giving as a share of disposable personal income fell from roughly 2.0 percent in 2017 to 1.9 percent in 2018, the first measurable year-over-year decline in this ratio outside a recession. In absolute terms, individual giving was roughly flat in nominal dollars and down two to three percent in real terms.
The decline was concentrated in the middle of the donor distribution. Large gifts — from donors above the threshold where the standard deduction expansion did not change their itemization decision — were stable or growing. Small and mid-range gifts — from households who had previously itemized but no longer would — declined disproportionately.
The number of US households that gave anything to charity at all also continued a multi-year decline that had begun in the early 2000s. By 2018, fewer than half of US households were donor households, down from over two-thirds in the year 2000. The TCJA accelerated but did not cause this trend.
The bundling response was real but incomplete
The strategy that fundraisers had encouraged in late 2017 — donors bundling two or three years of giving into a single year to clear the new itemization threshold — produced visible spikes in donor-advised fund contributions. National DAF inflows reached $37 billion in 2018, up sharply from the prior year. But the bundled-giving population did not fully replace the lost itemizing-household population. Many of the smaller donors who stopped itemizing simply stopped writing larger checks rather than restructuring their giving.
For organizations that had built donor pipelines on consistent annual giving from the upper-middle of the household income distribution — mainline congregations, mid-sized arts organizations, regional educational institutions — the structural change was material. Many spent 2018 and 2019 redesigning donor communication to focus on monthly giving programs, where the tax treatment was secondary to the convenience and relationship.
The sector’s policy response
Independent Sector, the Council on Foundations, and the National Council of Nonprofits coalesced around a renewed push for a "universal charitable deduction" that would restore some federal incentive to give for non-itemizers. The proposal had bipartisan supporters but moved slowly through congressional priority queues.
A version of the proposal would briefly become law in 2020, as part of the CARES Act’s emergency provisions, allowing non-itemizers to deduct $300 (or $600 for joint filers) of cash charitable contributions. That provision lapsed after 2021 and was not renewed in subsequent legislation despite continued advocacy. The structural narrowing of the deductible donor base that began in 2018 has not been reversed.